The Welsh midfielder has gone to Kenilworth Road initially on loan, with a view to a permanent deal – for an undisclosed fee – in January. Out of contract at the end of the season, the 27-year-old had asked to leave.
Mills, who was confronted with the situation within a couple of days of taking over the Bootham Crescent hot-seat, said repeated attempts had been made to persuade Lawless to change his mind – but to no avail.
In a club statement, York chiefs said they had been “extremely reluctant to let the player leave” but came to the conclusion it was “unfair to stand in his way if he wanted to move on”.
They also revealed Luton had been persistent in their efforts to sign Lawless, having increased their original offer on three occasions. He has been given the number 14 shirt and has gone straight into the squad for their televised clash on Thursday at Wrexham.
Mills said he had offered Lawless a contract extension and had continued to play him in the hope he would decide to remain at York. He played a full part in City’s 0-0 draw at Rotherham in the FA Cup first round on Saturday.
“I spoke to Alex about an extension to his contract – that’s how much I wanted him to stay at York,” he said. “He declined that and said he wanted to go and play for Luton. I am not the type that wants players at York City that have their minds elsewhere. It happened from the very first moment I walked into the football club – within a couple of days.
“It’s been kept quiet but I had numerous conversations with Alex and continued to play Alex because I want him to be at this football club. He has expressed on a few occasions that he wanted to go to Luton.
“I was still hoping until all this happened that he would change his mind and sit down and discuss a new contract. He wanted to get away.”
Mills, however, is already looking forward and confirmed he was still hoping to bring in some new players – whether that was on loan or through the transfer window in January. He stressed that any new arrivals had to be right for the club.
“I am going to get a squad of players that are committed to the football club,” he added. “I know Alex was popular for York and I know a few supporters will be disappointed.
“It’s about moving forward. It’s an opportunity for someone in the football club to step up or someone new. There are options. There are good players at this club. Chris Carruthers has come back and trained well. We have a game arranged tomorrow and he will play 90 minutes then, as will Levi Mackin.
“We have got Danny Racchi who can play in the middle of the park and David McDermott can play in there. I want to bring in a couple of attacking players if I can and I am working hard to do that as I feel that’s an area we need to strengthen.”
City bosses have confirmed, while thanking Lawless for his services to the club, the player will not be allowed to play against the Minstermen in any competition this season.